Getting on top of your finances is the theme for a few of our stories in the February issue to help working carers get a good start to 2015.

Have you let your finances slip over the last few months? There are a few simple, yet effective ways to improve your financial situation that can make a huge difference in the long run.

1. Start at the beginning If you’re serious about getting your finances in order you need to lay all of your ‘cards’ on the table. Open every single financial statement—bank, credit card, and mortgage statements. You will have a better chance at improving your finances if you know where you currently stand with your income and expenses. Consider signing up for online banking if you haven’t already. You can manage your finances 24/7 at home or on the go.

Tip: See Work ‘n’ Care story elsewhere in this issue about apps that can help you track your spending.

2. Don’t go ‘cold turkey’ with a budget that’s too tough Develop a budget or spending plan that actually works for you based on where you are right. Don’t go ‘cold turkey’ by cutting too much at once. Instead, try to gradually reduce spending in critical areas. Sudden cuts to costs can often backfire in the long term because it increases the chances of big financial splurges.

Tip: There are plenty of excellent budget tools and spreadsheets on the website of our savings partner www.simplesavings.com.au

3. Make this the year you tackle your credit card debt Control your credit, don’t let it control you. Every time you pay off a card with a 15 per cent interest rate, you get a 15 per cent return on your money. There are many providers that offer a low or zero per cent introductory offer for the first 6 to 18 months. If you can find a good deal, move your high-rate debt to that new card and whenever possible, pay more than the minimum repayment required.

Tip: See Work ‘n’ Care story elsewhere in this issue about the benefits of changing your credit card.

4. Remember that it’s the little things that count Memberships and ongoing contracts may only seem like small expenses, but these monthly charges add up over time. Change your mobile phone plan or get rid of the landline account unless you absolutely need it. Reconsider Pay TV and look at ways to cut back on utilities such as electricity.

Tip: Consider using a timing switch to turn off energy-hungry appliances like your fridge from 1am to 5am, when no one is opening the door anyway. Work ‘n’ Care staff have tried this with significantly reduced power bills.

5. Know Your Credit Rating If you have a poor credit rating, the two best ways to improve it are to pay your bills on time and push yourself to reduce your credit card balances. A good credit rating increases your serviceability, making it easier to get a better interest rate.

6. Get ahead in your mortgage Extra payments are effective at any time of the year but can be less painful after receiving a tax refund or bonus. Even small amounts that are contributed to your mortgage will add up over time.

Tip: Change your lender. The lowest interest rates in 20 years are available right now. For the sake of a few hours of paperwork, you could save many, many thousands by re-financing and getting a more competitive rate. If your home loan is more than 5% you are paying too much. It is worth switching. See: www.infochoice.com.au

7. Consider buying your own home It won’t be possible for everyone, but for some, the cost of repaying a home loan will be less than the cost of paying rent. Do the sums. With historically low interest rates, the time is good to see if you can afford a house or unit. And, it may even be cheaper.

Tip:Use an online home loan repayment calculator to see how much you would have to pay on a housing loan. For example, if you can buy a home for $250,000, the full loan repayment would be $320 a week, at an interest rate of 4.5% (a little bit less if you factor in a deposit). A loan of $350,000 would cost you about $450 a week. Visit: www.yourmortgage.com.au

Source: Thanks to the State Custodians finance blog for some of the above information.

Funded by...

The Working Carers Gateway is funded by Family & Community Services NSW